The regulatory agency said that banks will need to monitor transactions related to the platform. The superintendency seeks to detect the “intermediaries” operating on the website.

In recent days, the Superintendency of Institutions of the Banking Sector of Venezuela (Sudeban) issued an alert against the exchange platform AirTM. The regulatory agency announced the detection of “unusual operations”, presumably related to money laundering and terrorist financing.

Sudeban, along with the Financial Intelligence Unit (UNIF), explained that AirTM offers a virtual account that is “outside the controls established in the financial sector.” The statement occurred after they had conducted risk prevention and control monitoring.

The superintendency called on national banks to exert greater control of transactions related to the platform. In this regard, they highlighted that “the national banking system must conduct exhaustive monitoring of the said transactions.” They also said that “banking institutions need to ensure the transparency of transactions.”

Something notable about the statement is the fact that UNIF also urged banks to report intermediaries “that lend themselves to transactions on this type of platform.” It is not clear whether the authorities would block users’ accounts or initiate an investigation.

Sudeban cites compliance with Resolution 083.18 on the administration and control of risks related to money laundering, terrorist financing, and proliferation of weapons.

Blocking of AirTM in Venezuela

Last August 20^th, a Twitter user identified as @vesinfiltro reported the blocking of the AirTM website in Venezuela. In the message, the user explained that the service was not available for these operators: CANTV, Movistar, Digitel, Supercable, and Movilnet.

The action reportedly was through DNS blocking, about which @vesinfiltro reported that “AirTM has already been subject to blocking in the past, mainly for publishing exchange rates and currency exchange operations. There is documentation that recorded this using expert-reviewed OONI and ad-hoc metrics.”

Users of this exchange platform also stated that they could not access the website. One of them, identified as @ DimasMorillo89, asked what was happening with the platform. The company replied by providing a link on how to enter it without any blocking or restriction. However, the user did not receive information about the decision by Sudeban and UNIF.

There was a restriction in the access to the AirTM website from Digitel and Movistar, but the same did not happen with private Internet providers. However, it is not clear when the blocking of the website started.

This platform operates in the cloud, in which users can exchange funds through intermediaries, better known as “tellers”. These are users that the company endorses, who have funds in different payment processors for the exchange of balance in different currencies.

The CEO of the company, Rubén Galindo, said in December 2018 that Venezuela accounted for 65% of the total users of the platform. The executive highlighted that the oil-producing country was the first where AirTM achieved mass adoption.

This exchange platform also includes among its services the purchase of cryptocurrencies such as Bitcoin (BTC). To acquire crypto assets, Venezuelan users must deposit a given amount in bolivars (VES) and later exchange it for AirTM dollars.

By Alexander Salazar

The draft law emerges from the need to fight money laundering. It includes penalties for those who promote pyramid schemes.

Brazilian Senator Soraya Thronicke introduced a bill that covers various issues related to Bitcoin (BTC) and cryptocurrencies in general.

This project aims to regulate transactions with cryptocurrencies under the orbit of the Central Bank and the Brazilian Securities and Exchange Commission (CVM).

The draft law suggests that, when people use Bitcoin as a means of payment, the Central Bank is in charge of determining the regulatory framework. However, if they use it as a guarantee or investment instrument, the Stock Market Commission would establish the rules.

Thronicke, a member of the Social Liberal Party, also seeks that the bill considers financial pyramids to be federal crimes. Once approved, this draft law would cover them under Law 7,492, which establishes a prison penalty of between 6 months and 2 years, as well as a fine for those who commit “crimes against the financial system.”

Concerning the companies that offer cryptocurrency custody services, the bill establishes that they will not be able to use the funds without the express authorization of the investors.

The draft law establishes that only legal persons can issue “digital assets”. They must be able to justify that the issuance of these assets is compatible with their activities.

They must provide customers with “clear, accurate and non-misleading” information about the assets. This information must include tax obligations stemming from their holding or trading.

Lastly, the project seeks to strengthen the role of the Brazilian tax collecting agency. If the law is passed, the State would have greater powers regarding the collection of taxes in activities related to Bitcoin and other cryptocurrencies.

The senator justified the introduction of this bill by stating the need to emphasize the fight against money laundering.

Bitcoin Is Hard to Regulate in Brazil

It is not the first time that the Brazilian Legislative Power has introduced draft laws of this type.

It was necessary to wait several years for the treatment of a bill introduced in 2015. In 2019, there was a possibility of debating it in Parliament, but other priorities led to suspending it.

The lack of specific state regulations for the field of Bitcoin and other cryptocurrencies, the companies of the Brazilian crypto ecosystem themselves recently established self-regulation agreements.

The members of the Brazilian Association of Cryptoeconomics (ABCripto) signed a code that includes know-your-customer (KYC) policies, without a state order requiring it.

Among these companies are the exchanges Foxbit, Ripio, Bitcoin Market, and NovaDAX. Together, these companies concentrate on 80% of the volume of transactions in cryptocurrencies in Brazil and aim to trade around USD 100 billion in the remainder of this year.

Bitcoin Users’ Reactions on the Social Media

According to comments on social media, Brazilian users of Bitcoin and other cryptocurrencies do not seem, in general, happy with the State regulating their activities.

“The fact that a senator is proposing laws about something that she does not understand is nothing new,” said a social network user. Another referred to the political group of which Thronicke is a member, saying that “the Social Liberal Party is not liberal at all.”

Several others also predicted that this draft law is doomed to fail, just as happened with its predecessors.

By Alexander Salazar

The digital yuan might have an official use in the 2022 Winter Games. The tests focus on assessing the operational resilience of the digital currency.

China’s government will test its central bank digital currency (CBDC), the digital yuan, in a larger number of regions in the country.

The Ministry of Commerce of the Asian country announced on August 14^th the extension of the use of the digital yuan to 3 new regions. These add to those where the pilot plan is already under implementation.

The agency said that, together with the Central Bank of China (PBOC), they consider that the digital yuan meets the technical conditions to undergo tests in more places.

The areas where tests will soon take place are Beijing-Tianjin-Hebei, Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, in the east of the country. In these regions, the most prominent feature is the inclusion of cities with great commercial and financial activities, such as Beijing and Hong Kong.

These 3 areas will add to the 4 places where the CBDC has undergone tests since last April: Shenzhen, Chengdu (Sichuan province), Suzhou (in the center and southeast of the country), and the city of Xiong’an (in the northeast).

The tests are also taking place on some of the sites of the 2022 Winter Olympics. There is no official schedule for the launch of the digital currency, but it seems that the idea is to have it ready for this event.

Digital Yuan is Tested in Retail Payments

In the pilot areas, people are using the digital currency for various small-scale payments. These include the retail sale of food and groceries in stores, restaurants, and supermarkets, together with the recharging of public transportation cards.

According to Yang Dong, Director of the Blockchain and Financial Technology Research Center at Renmin University Institute of Law and Technology, “the design of most applications is aimed at end consumers.” He says that “it will take time to apply the model in wholesale trade.”

“We are conducting various stress tests,” said the supervisor of a bank’s technical department in Suzhou. He added that the pilot plan focuses on testing payments with digital currencies and measuring the stability of the system.

In this way, they assess the behavior of the system in the face of an increase in the volume of transactions and they work on the design of technical solutions to ensure operational resilience. They are also testing offline transfer functions using near-field communication (NFC) technologies so that people can make offline transactions.

The banks participating in the tests regularly report on the technical achievements and emerging operational problems. The official said that “the goal is to use the digital currency in other areas, such as health care, education, e-commerce, tourism, and cultural consumption”.

Concerning the progress of this pilot, user María Shen, an expert cryptography engineer, posted on Twittera video showing one of these test transactions last August 19^th.

The CBDC is a state alternative to the retail payment solutions that have proliferated in China, under the lead of Alipay and WeChatPay. Additionally, they expect to promote the use of the national fiat currency (renminbi or yuan) for cross-border payments to eliminate the dependence on the US dollar.

By Alexander Salazar

The US Dollar Index (USDX) fell to its second low of 2020. Asia seems to be Latin America’s largest trading partner in the Bitcoin market.

After surpassing the USD 12,000 mark in recent days, Bitcoin peaked at USD 12,418. The release of Federal Reserve minutes confirming a bleak outlook for the US economy may have created the bullish momentum.

The crossing of the USD 12,000 barrier coincided with a further drop in the US dollar index, which reached a new low of 92.15 on August 18^th, after 2 years. However, Bitcoin recorded a sharp setback earlier that day and then fluctuated around USD 11,600. At the time of writing this article, Bitcoin is trading at USD 11,770.

When examining the flow of BTC in the hands of miners during the last week, CryptoQuant recorded a growth of daily movements towards cryptocurrency exchanges, which reached levels close to 2,000 BTC per day. This increase could partly explain the decline in the price of BTC from USD 12,000, by increasing the supply offered for sale.

The last week concluded with a net retracement of the BTC price of 1.4%. However, the drop is more important in the case of the total capitalization of the cryptocurrency market and in the capitalization of altcoins, which have decreased by 3.3% and 3.9%, respectively.

Concerning the new low of the US dollar index this year (calculated against a basket of seven national fiat currencies), it reached 92.15 on August 19^th. The minimum that it reached last August 3^rd was 92.63.

Featured Tweet of the Week

Dutch institutional investor PlanB, creator of Bitcoin’s stock-to-flow model, notes that the price of Bitcoin is “elegantly” moving away from the 200-week moving average curve. Moving averages derive from calculating the average price of an asset over a certain period. For instance, among the most used are the 50- or 200-day moving averages, which refer to the last 50 or 200 days.

In this case, work takes place in 200 weeks, a little less than four years. PlanB says that the current value on the resulting curve is USD 6,400, and it grows by USD 200 every month. “Best of all, the monthly close for BTC has never been below the 200WMA curve,” says PlanB. Another interesting detail is that each point of contact of the price curve with the curve of this moving average index corresponds to the bottom of a valley.

Asia is Latin America’s Partner on Bitcoin

According to the last report by the blockchain analysis firm Chainalysis, Asia is the continent that sends the largest amount of Bitcoin to Latin America. Countries such as China, Japan, and South Korea have become the most important trading partners in the Latin American ecosystem.

Between July and June, East Asia sent more than USD 10 billion worth of cryptocurrencies to addresses in Latin American countries. In this way, the Asian continent becomes the largest provider of Bitcoin and other cryptocurrencies for companies and users in Latin America.

Actual Size of DeFi on Ethereum

In recent months, the growth of decentralized finance (DeFi) platforms has been explosive. They reached the first USD 1 billion worth of locked value, in collateral or loan guarantees last February and in early June, after markets dropped on March 12^th.

Tracking the noticeable DeFi boom in June and July, it is possible to see that the total value locked doubled and tripled. This occurred particularly due to the positive impact of the introduction of the COMP token on the Compound lending platform.

More recently, the introduction of the Curve DAO token helped Ether cross the USD 400 barrier and lift the value locked on DeFi platforms above USD 6 billion. This is a very noticeable growth, with a six-fold increase in locked value since February this year.

However, DeFi barely exceeds the value of institutional investments in BTC, considering only Grayscale’s Bitcoin fund. Investments in GBTC are about 75% of the locked value in DeFi. On the other hand, these investments in DeFi are equivalent to 3.1% of the market capitalization of Bitcoin.

By Willmen Blanco

Half of Ethereum’s nodes are between the United States, China, and Germany. Vitalik Buterin himself has said that a node does not run on Ethereum.

Most of Ethereum’s nodes are in cloud hosting services. In other words, they are hosted on third-party servers, so they are not under the control of their respective users.

A total of 6,043 nodes, around 67% of the current assets on the network, are hosted on these services. Only 2,452 (27%) are located in residences, according to data from ethernodes.org.

More than half of the nodes currently used in cloud hosting services are at just two providers: Amazon and Alibaba. In other words, if the services of these two providers were at risk or stopped working, a third of Ethereum’s nodes would go down.

As most of the nodes are in the aforementioned hosting services, it is possible to see that more than 40% of the nodes on the network are between the United States of America and China. When adding those that are in Germany, more than 50% are between the three countries.

Few Ethereum nodes are in Latin America, according to Ethernodes. Brazil, the country in the region with most of these nodes, barely has 23 (0.26% of the total). Venezuela (10), Mexico (7), Argentina (7), and Colombia (4) follow the South American giant.

Meanwhile, geth remains as the main Ethereum client with almost 80% of the nodes. Another 10% corresponds to Parity, which reported last December a possible attack that was preventing its synchronization after the Muir Glacier hard fork.

The fact that Vitalik Buterin himself, founder of the project, has acknowledged not running an Ethereum node adds to the fact that 2 thirds of the nodes depend on a service that third parties provide.

This situation in which the founder of the project does not run his node can be an example of the difficulty and cost of running a full node on Ethereum. Buterin referred to the nodes that keep Ethereum’s entire history as “big and scary.” In a few words, the complete blockchain record already weighs about 5 TB.

Ether Supply and Unsynchronized Nodes

Ethernodes shows that almost 27% of Ethereum’s nodes are currently unsynchronized. In both those hosted on the cloud and those in residences, there are more than 1,000 nodes without synchronization.

The most recent controversy regarding Ethereum has revolved around the supply of its native cryptocurrency, Ether (ETH). Buterin himself said that he did not know the total ETH in circulation.

In addition to the number of unsynchronized nodes, it is generally difficult to accurately track the issuance of ETH, according to renowned ecosystem educator Andreas Antonopoulos.

The author of the book Mastering Ethereum belittled the fact referring to the speed of block creation on Ethereum, which is much higher than on Bitcoin.

Antonopoulos also mentioned “uncle blocks”, in charge of rewarding miners that came very close to generating a block. Given that “not all nodes see the uncles at the same time,” the user gets a different picture of the ETH supply in each case, according to the expert.

By Alexander Salazar